Correlation Between QBE Insurance and Corporate Travel
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Corporate Travel at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining QBE Insurance and Corporate Travel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QBE Insurance Group and Corporate Travel Management, you can compare the effects of market volatilities on QBE Insurance and Corporate Travel and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in QBE Insurance with a short position of Corporate Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Corporate Travel.
Diversification Opportunities for QBE Insurance and Corporate Travel
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between QBE and Corporate is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Corporate Travel Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Travel Man and QBE Insurance is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on QBE Insurance Group are associated (or correlated) with Corporate Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Travel Man has no effect on the direction of QBE Insurance i.e., QBE Insurance and Corporate Travel go up and down completely randomly.
Pair Corralation between QBE Insurance and Corporate Travel
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.62 times more return on investment than Corporate Travel. However, QBE Insurance Group is 1.6 times less risky than Corporate Travel. It trades about 0.07 of its potential returns per unit of risk. Corporate Travel Management is currently generating about 0.01 per unit of risk. If you would invest 731.00 in QBE Insurance Group on September 12, 2024 and sell it today you would earn a total of 449.00 from holding QBE Insurance Group or generate 61.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. Corporate Travel Management
Performance |
| Timeline |
| QBE Insurance Group |
| Corporate Travel Man |
QBE Insurance and Corporate Travel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Corporate Travel
The main advantage of trading using opposite QBE Insurance and Corporate Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Corporate Travel can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Corporate Travel will offset losses from the drop in Corporate Travel's long position.| QBE Insurance vs. Insurance Australia Group | QBE Insurance vs. Superior Plus Corp | QBE Insurance vs. SIVERS SEMICONDUCTORS AB | QBE Insurance vs. CHINA HUARONG ENERHD 50 |
| Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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